TIDMWOSG
RNS Number : 2076Z
Watches of Switzerland Group PLC
20 May 2021
Watches of Switzerland Group PLC
Q4 FY21 Trading
for the 14 weeks (Q4) and 53 weeks (FY) to 2 May 2021
Strong finish to year with Adjusted EBITDA expected at upper end
of guidance
Outstanding US performance and robust UK trading despite
extended lockdown
Watches of Switzerland Group PLC ("the Group") today provides
the following update relating to the 14 and the 53 weeks ending 2
May 2021.
FY21 Highlights
-- Group revenue GBP905.1 million (FY20: GBP810.5 million),
+13.3% in constant currency, +11.7% in reported terms relative to
FY20 and +17.9% in constant currency relative to FY19
o Sales in line with guidance despite extended UK lockdown in Q4
(16 weeks vs Group's assumption of 6 weeks) and adverse FX
movements
-- Outstanding growth in the US with revenue +38.5% vs FY20 and
+64.8% vs FY19 (both in constant currency); investments and
initiatives exceeding expectations and driving broad-based growth,
including encouraging early results from the relaunch of luxury
jewellery in Mayors
-- Robust UK revenue performance +3.6% vs FY20 despite store
closures for c. 26 weeks of the year (FY20: 6 weeks) and
significantly reduced tourism and airport business (+3.1% relative
to FY19)
-- Luxury Watches +16.0% relative to FY20 to represent 87.1% of Group revenue (FY20: 83.9%)
-- Significant step-up achieved in Group ecommerce sales +120.5% relative to last year
-- Domestic sales now represent 94.7% of Group revenue (FY20: 72.5%)
-- Proactive application of advanced technology to digital
marketing, customer relationship management ("CRM") and clienteling
which continue to play an important role in driving business
performance, generating strong conversion rates despite reduced
store traffic
-- FY21 Unaudited adjusted pre-IFRS 16 EBITDA [1] expected to be
between GBP104.0 million and GBP107.0 million (FY20: GBP78.1
million), implied margin between 11.5% and 11.8% (FY20: 9.6%)
-- Confirmed planned repayment of all furlough support received
during the period from the UK Government
-- Repayment and cancellation of GBP45.0 million Coronavirus
Large Business Interruption Loan Scheme facility as a result of a
continued strong business performance
-- Approval to launch the Watches of Switzerland Group
Foundation ("the Foundation") with GBP1.5 million initial
contribution with an additional GBP1.5 million committed for
FY22
-- Net debt [2] GBP43.9 million as at 2 May 2021 (26 April 2020:
GBP129.7 million) relative to guidance range of GBP60.0 million to
GBP80.0 million
Q4 FY21 Highlights
-- Group revenue GBP218.2 million (Q4 FY20: GBP123.9 million),
+81.8% constant currency, +76.1% in reported terms relative to Q4
FY20 and +24.7% in constant currency relative to Q4 FY19
-- UK revenue GBP126.2 million (FY20: GBP84.6 million); +49.3%
vs Q4 FY20 and -2.7% relative to Q4 FY19
o Stores generated strong growth upon re-opening, having been
closed since 26 December 2020
o Further development of mono-brand channel with three boutiques
opened in the UK
o Continued strong ecommerce sales +218.1%
-- US revenue GBP92.0 million (FY20: GBP39.3 million), +151.4%
in constant currency, +133.6% in reported terms vs Q4 FY20 and
+95.9% in constant currency relative to Q4 FY19
o Mayors stores in Florida and Georgia and Watches of
Switzerland stores in New York continue to experience strong
momentum whilst Las Vegas has seen improving trends, reflecting the
easing of restrictions in this market
o Eight recently opened mono-brand boutiques in five locations
performing well
o Initial results from recent ecommerce launch are according to
plan and encouraging
Outlook
-- The Group plans to continue to invest in growth and advancing its key strategic priorities
-- During FY22, the Group does not assume any supply disruption
or any national lockdowns in any of its markets with a gradual
recovery in footfall anticipated. Our guidance reflects visibility
of supply of key brands. The Group does not expect the return of
tourism and airport business to pre-pandemic levels during the
year. The Group provides the following guidance on a 52-week,
pre-IFRS 16 and organic basis:
o Revenue: GBP1.05 billion - GBP1.10 billion
o EBITDA and Adjusted EBITDA margin %: flat to +0.5% vs last
year
o Depreciation, amortisation, impairment and profit/loss on
disposal of fixed assets: GBP30.0 million - GBP32.0 million
o Total finance costs: GBP4.0 million - GBP4.5 million
o Underlying tax rate: 21.0%-22.5%
o Capex: GBP40.0 million - GBP45.0 million
o Net debt: GBP20.0 million - GBP30.0 million
o USD/GBP rate of $1.40
o Additional GBP1.5 million contribution to the Foundation
-- The Group has an exciting pipeline of store projects planned:
o Continued investment in Mayors network in Florida and
Georgia
o Opening of new store in American Dream, New Jersey
o Further mono-brand activity in the UK and the US
o Opening of refurbished ex Fraser Hart stores
o Opening of refurbished store in Aventura, Florida
o Opening of refurbished Rolex boutique in Wynn Las Vegas
o Opening of new Watches of Switzerland store in Battersea
o Commencement of roll out of Goldsmiths Luxury elevated store
formats
-- The Group plans to announce FY21 results on 8 July 2021
alongside further details on long-term strategic direction and
priorities
Brian Duffy, Chief Executive Officer, said:
"We finished the year strongly and enter the new financial year
with real momentum, continuing to prove the value of our highly
differentiated model. Our teams have adapted and pushed on,
stepping up to the challenges and opportunities with inspirational
enthusiasm and positivity. I am very proud of what they have
achieved and thank them for their immense contribution.
Throughout the year we either met or exceeded our guidance
despite the changing circumstances, in particular, the much
longer-than-expected last lockdown in the UK. In the UK, we
delivered a very robust performance, overcoming a total of 26 weeks
of store closures and hugely reduced travel and tourism business.
In the US, we generated an outstanding result with very strong
momentum.
We responded to the challenging environment by increasing
investment in capex, digital marketing, systems and stock which has
resulted in the positive momentum that we carry into FY22. Our
guidance for FY22 reflects our confident outlook for the luxury
watch and jewellery categories and the success of our modern,
international and multi-channel model.
Supporting our local communities is integral to our culture. I
am therefore delighted to announce we have decided to approve the
launch of the Watches of Switzerland Group Foundation, which will
provide essential support in the communities where we live and work
in the UK and in the US with an initial contribution of GBP1.5
million and plans to build this during FY22 and beyond.
Looking ahead, we are confident in our plans to continue
investing for growth and to sustain the momentum we have built into
FY22 and beyond. We look forward to providing an update at our
full-year results on our strategy to further enhance our leading
position in the UK and become a leader in the US luxury watch
market."
Q4 FY21 Revenue Performance by Geography
Q4 FY21 Q4 FY20 Q4 FY21 vs Q4 FY21 vs
Q4 FY20 Q4 FY19
---------------
14 weeks 13 weeks 2-year
to to Constant constant
(GBPm) 2 May 26 Apr currency 2-year currency
2021 2020 YoY % YoY % YoY % YoY %
--------- --------- ------- ------------- ------- ----------
UK 126.2 84.6 49.3% 49.3% (2.7)% (2.7)%
--------- --------- ------- ------------- ------- ----------
US 92.0 39.3 133.6% 151.4% 85.1% 95.9%
--------- --------- ------- ------------- ------- ----------
Group Revenue 218.2 123.9 76.1% 81.8% 21.6% 24.7%
--------- --------- ------- ------------- ------- ----------
Nb: all YoY and 2-year comparisons are 14 weeks vs 13 weeks
FY21 Revenue Performance by Geography
FY21 FY20 FY21 vs FY20 FY21 vs FY19
---------------
53 weeks 52 weeks 2-year
to to Constant constant
(GBPm) 2 May 26 Apr currency 2-year currency
2021 2020 YoY % YoY % YoY % YoY %
--------- --------- ------ ------------- ------- ----------
UK 606.5 585.5 3.6% 3.6% 3.1% 3.1%
--------- --------- ------ ------------- ------- ----------
US 298.6 225.0 32.7% 38.5% 61.2% 64.8%
--------- --------- ------ ------------- ------- ----------
Group Revenue 905.1 810.5 11.7% 13.3% 17.0% 17.9%
--------- --------- ------ ------------- ------- ----------
Nb: all YoY and 2-year comparisons are 53 weeks vs 52 weeks
Q4 FY21 Revenue Performance by Category
Q4 FY21 Q4 FY20 Q4 FY21 Q4 FY21
vs Q4 vs Q4
FY20 FY19
------------------
14 weeks 13 weeks
to to
(GBPm) 2 May 26 Apr 2-year
2021 2020 YoY % YoY %
--------- --------- -------- --------
Luxury watches 195.1 104.1 87.3% 30.0%
--------- --------- -------- --------
Luxury jewellery 11.7 10.5 11.9% (18.5)%
--------- --------- -------- --------
Other 11.4 9.3 22.9% (23.2)%
--------- --------- -------- --------
Group Revenue 218.2 123.9 76.1% 21.6%
--------- --------- -------- --------
Nb: all YoY and 2-year comparisons are 14 weeks vs 13 weeks
FY21 Revenue Performance by Category
FY21 FY20 FY21 FY21
vs FY20 vs FY19
------------------
52 weeks
53 weeks to
(GBPm) to 26 Apr 2-year
2 May 2021 2020 YoY % YoY %
------------ --------- --------- ---------
Luxury watches 788.4 679.9 16.0% 24.9%
------------ --------- --------- ---------
Luxury jewellery 60.8 69.1 (12.1)% (18.7)%
------------ --------- --------- ---------
Other 55.9 61.5 (9.2)% (17.1)%
------------ --------- --------- ---------
Group Revenue 905.1 810.5 11.7% 17.0%
------------ --------- --------- ---------
Nb: all YoY and 2-year comparisons are 53 weeks vs 52 weeks
Q4 FY21 and FY21 % Total Potential Traded Hours
Q4 FY
-------
UK* 13% 42%
----- -----
US 77% 67%
----- -----
Group 40% 50%
----- -----
* some stores able to conduct click and collect activity during
lockdowns 2 (November 2020) and 3 (December 2020 to April 2021)
Conference call
A webcast conference call for analysts and investors will be
held at 9.00am (UK time) today. To join the call, please use the
following details:
Dial-in: +44 20 3936 2999
Conference access code: 353825
Contacts
The Watches of Switzerland Group
Anders Romberg, CFO +44 (0) 116 2817 401
Allegra Perry, Investor Relations +44 (0) 20 7317 4600
investor.relations@thewosgroup.com
Headland
Lucy Legh / Rob Walker +44 (0) 20 3805 4822
wos@headlandconsultancy.com
About the Watches of Switzerland Group
The Watches of Switzerland Group is the UK's largest luxury
watch retailer, operating in both the UK and US, comprising four
prestigious brands; Watches of Switzerland (UK and US), Mappin
& Webb (UK), Goldsmiths (UK) and Mayors (US), with
complementary jewellery offering.
As at 2 May 2021, the Watches of Switzerland Group has 148 core
stores across the UK and US (which includes 39 dedicated mono-brand
stores in these two markets in partnership with Rolex, TAG Heuer,
OMEGA, Breitling, Audemars Piguet, Tudor and FOPE) and has a
leading presence in Heathrow Airport with representation in
Terminals 2, 3, 4 and 5 as well as six transactional websites.
The Watches of Switzerland Group is proud to be the UK's largest
retailer for Rolex, Cartier, OMEGA, TAG Heuer and Breitling
watches.
Mappin & Webb holds Royal warrants as goldsmiths,
silversmiths and jeweller to Her Majesty The Queen and silversmiths
to His Royal Highness The Prince of Wales. The Mappin & Webb
master jeweller has been Crown Jeweller, custodian of the Crown
Jewels of Her Majesty The Queen since 2012.
https://www.thewosgroupplc.com
[1] Unaudited adjusted pre-IFRS 16 EBITDA is EBITDA before exceptional and non-underlying items. Non-underlying items includes loss on disposal of property, plant and equipment, costs from non-trading activities and management fees. Shown on a continuing basis.
[2] Net debt is total borrowings before adjusting for
capitalised transaction costs less cash and cash equivalents
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